APRA chairman eyes big four banks' mortgage war

APRA's new chairman has also worked with the international financial regulator, the BIS.

ABC News

The country's new banking regulator has hit the ground running.

Australian Prudential Regulation Authority chairman Wayne Byres is three weeks into the job, but he is already flat out keeping an eye on the big four banks and their mortgage lending battles and reading the rule book to financial newcomer Woolworths.

"As I was sitting at the table, various tables in international forums with a neutral hat on, in my previous role, it was very clear that the Australian participants in all of these discussions and negotiations were actually very effective in influencing the outcomes," Mr Byres said.

While the big banks have complained about tougher rules since the GFC, in the wake of the financial system inquiry interim report, Wayne Byres says more needs to be done.

"That a return to the past, a return to the pre-crisis era, was actually a return to competition based on lax management, excessive leverage and underpricing of risk," he cautioned.

Mr Byres says rules being developed for the biggest global banks to hold more capital will inevitably change the Australian landscape too.

He also warns the regulator will almost certainly be tested by another financial crisis.

"Unfortunately, there will be future crises. We hope they're some way into the distance, but you can never say never," he added.